Bryant Avenue Tenants' Association v. Koch

Orders of the Supreme Court, New York County (Elliott Wilk, J.), entered July 9, 1991, which, inter alia, granted a preliminary injunction enjoining defendant 69 Tiemann’s Owner’s Corp. from collecting rent increases attributable to Major Capital Improvements (MCIs) in excess of 6% per year and denied motions by defendants Hyde Park Associates and Regents Park Associates to vacate or modify preliminary injunctions previously entered which enjoined them from attempting to collect rent increases attributable to MCIs in excess of 6% per year and from merging MCI rent increases into the permanent rent base, are reversed, on the law and facts to the extent appealed from, the motion by plaintiffs denied and the motions by defendants granted, without costs or disbursements. We recognize, as does the dissent, that the award of MCI rent increases which are merged into the stabilized base rent has been upheld by this Court and the Court of Appeals. Thus, we have previously noted, "The question of whether an MCI increase becomes a permanent part of the stabilized base rent has just been determined in the landlord’s favor in Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal (75 NY2d 206).” (Matter of Ansonia Assocs. v State Div. of Hous. & Community Renewal, 157 AD2d 583, 584.) However, unlike the dissent, we do not find any violation of the Rent Stabilization Law in the award of temporary retroactive rent increases of 6% annually in addition to the prospective MCI increases. As recognized by the dissent, applications by landlords for rent increases based on Major Capital Improvements can take the agency as long as 3 years to process and approve. It would not only be unfair but would also act against the purposes of the Rent Stabilization Law to disallow earned increases during these periods. Such a policy, in the face of the long delays inherent in this government bureaucracy, would encourage a disinclination by landlords to expend any large sums of money in improving properties. [767] Further, the law prohibits increases in excess of 6% per year. However, MCI increases are effective as of the first rent payment occurring 30 days after the filing of the application by the landlord. Thus, the agency, in awarding temporary retrocative rent increases, is simply allocating, albeit some time in the future, a 6% increase for that period of time immediately after the application, and the tenant, therefore, does not pay in excess of 6% per year. The Legislature is certainly aware of this practice of the agency in awarding temporary retroactive rent increases, and has not made any changes in the law expressly forbidding such practice. This action of the legislative authority, in not "choosing to amend the statute to provide otherwise, has acquiesced in this construction” (Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206, 215, supra). Concur—Murphy, P. J., Sullivan and Asch, JJ.